Fuel Oil & LP Gas Dealers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 4,175 fuel dealers in the US generate revenue by selling heating fuels, such as LP gas, fuel oil, or kerosene, to a variety of customers, including residential, commercial, and industrial accounts. Other sources of revenue include the lease or rental of LP gas (aka propane) storage tanks and related services. Companies may also sell, install, and service appliances and heating/AC systems. Some large companies operate LP tank or cylinder exchange programs.
Declining Demand
Demand for LP gas and fuel oil for heating is declining, with revenue fluctuations driven primarily by pricing changes and weather conditions.
Seasonality and Weather
Industry sales are seasonal and peak during the “winter heating season," which runs from approximately November through March.
Industry size & Structure
The average fuel oil or LP gas dealer operates out of a single location, employs 17 workers, and generates about $9-10 million annually.
- The fuel oil and LP gas dealer industry comprises 4,175 companies that employ about 71,600 workers and generate about $40 billion annually.
- The industry is somewhat concentrated at the top; the top 50 firms account for 43% of industry sales.
- Large companies include Amerigas Partners, Ferrellgas Partners, Star Group, and Suburban Gas Partners.
- To lower the cost of providing service, most small companies operate locally. Some small companies are family-run and passed down through generations.
Industry Forecast
Fuel Oil & LP Gas Dealers Industry Growth
Recent Developments
Dec 23, 2024 - Lower Winter Heating Costs
- Homes that rely on heating oil — highly concentrated in the Northeast — can expect to spend about 5% less this winter than last, with an average cost of $1,140, despite an anticipated 4% increase in demand due to colder temperatures, according to the Energy Information Administration’s Winter Fuels Outlook 2024-2025. The EIA assumes this winter will be colder than last winter across much of the US, especially in the Midwest, and that temperatures will be closer to average following last year’s very mild winter. Households heating with heating oil are expected to consume an average of about 400 gallons this winter with prices averaging $3.50/gallon, down 9% from last winter. Households heating primarily with propane will pay about the same amount as they did last winter on average across the nation. Propane is used for heating in 5% of households, mostly in rural areas.
- Employment by fuel oil & LP gas dealers was unchanged year over year in October while average industry wages rose 1.5% over the same period to $27.87 per hour, according to the latest US Bureau of Labor Statistics data. Sales for the US fuel oil and LP gas dealers industry are forecast to grow at a 1.85% compounded annual rate from 2024 to 2028, slower than the growth of the overall economy, according to the Interindustry Economic Research Fund, Inc.
- Vermont’s Public Utilities Commission is considering alternatives to the state’s Clean Heat Standard (CHS) after concluding the new standard is overly complicated and would burden businesses and consumers. The commission’s reconsideration came a month after Vermont Governor Phil Scott called the projected costs of the CHS “alarming,” in a September press conference. In 2023, Scott vetoed S.5, or the “Affordable Heat Act” which established a CHS, but the Legislature overrode his veto. Proponents say the bill’s ultimate goal is to move Vermont away from primarily heating buildings with high-carbon fossil fuels. Fuel suppliers oppose it, saying the policy would put small companies out of business. The bill required the PUC to craft a credit system by which homeowners, plumbers, fuel dealers and others could earn credits by installing certain “clean heat” measures. Given Vermont’s heavy reliance on fuel oil, home heating accounts for more emissions than any other sector.
- As operations at fuel delivery companies become increasingly connected, cybersecurity has become a rising concern for fuel dealers, LP Gas magazine reports. A survey of 127 fuel delivery companies found that hacks and breaches, ransomware, viruses, and security are their biggest concerns. To protect themselves and their customers, companies are investing in tools and strategies to protect data, including password protection, firewalls, two-factor authentication, cybersecurity training, and disk encryption, according to the Cargas 2024 Top Technology Trends in Fuel Delivery Benchmarking Report. To manage their cybersecurity needs, almost half of respondents to the Cargas survey reported relying on a combination of internal and external IT resources, while about a third relied on an in-house IT person/team. A minority said they had no dedicated cybersecurity resources.
Get A Demo
Vertical IQ’s Industry Intelligence Platform
See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.
Build valuable, lasting relationships by having smarter conversations -
check out Vertical IQ today.